Are you interested in how Warren Buffett invest? I took a look at his diversification and found it interesting how limited his diversification actually is. When we think diversification, we often think of breaking the sectors evenly but the reality is that sectors are not even in the real world and it’s possible that your investing approach favor some sectors over others.
I track my diversification as a strategy to systematically invest in a sector out of favor when I have new money to add. I don’t really rebalance every year as I usually add money to bring the sectors in line to what I want it to be at but it’s not out of questions in the future. It allows for a systematic way to buy low and sell high without trying to assess if markets or stocks are overvalued.
This past month, I have made the decision to drop 2 sectors from my investing strategy and drop the 2 stocks I was holding in the sectors. I am not investing in the basic material and consumer cyclical anymore. I felt that holding on to those two sectors was hampering my ability to fully benefit from other sectors that better match my 7 investing rules. I have therefore increased my target for the consumer defensive, financial and healthcare sectors.
I dropped McDonald’s NYSE:MCD and Agrium TSE:AGUNYSE:AGU from my portfolio. As I mentioned, it’s not about the companies and their potential but rather an overall portfolio decision. The healthcare sector benefited from this adjustment. I now have 29 unique holdings across all of my accounts with Telus TSE:TNYSE:TU being my largest holding followed closely behind by Johnson & Johnson NYSE:JNJ.
My March dividend income adds up to $1,566.18. A new record in monthly dividend income for my portfolio. This monthly increase comes from many annual dividend increases and new money added earlier in the year. The both together contributed to a decent monthly increase.
Considering my investing strategy for selecting a stock is based on the Chowder Rule and the 10-10 rule where a stock must have increased its dividend by 10% on average over 10 years, it’s understandable that I can see a good increase once a year.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.